Risk Considerations
Equity Risk. An investment in a portfolio containing common stocks is subject to certain risks, such as an economic recession and the possible deterioration of either the financial condition of the issuers of the equity securities or the general condition of the stock market.
Sector Concentration Risk. A portfolio which is concentrated in an individual sector is subject to additional risks, including limited diversification.
Asia Pacific Risk. Certain securities held by the portfolio are issued by companies in the Asia Pacific region, making the portfolio more susceptible to the economic, market, regulatory, political, natural disasters and local risks of the Asia Pacific region. The region has historically been highly dependent on global trade which creates a risk with this dependency on global growth. The stock markets tend to have a larger prevalence of smaller companies that are inherently more volatile and less liquid than larger companies.
Emerging Markets Risk. Risks associated with investing in non-U.S. securities may be more pronounced in emerging and developing markets where the securities markets are substantially smaller, less developed, less liquid, less regulated, and more volatile than the U.S. and developed non-U.S. markets.
Europe Concentration Risk. Because the portfolio is concentrated in companies headquartered or incorporated in Europe, the portfolio may present more risks than a portfolio which is broadly diversified over several regions.
Foreign Securities Risk. Securities of non-U.S. issuers are subject to additional risks, including currency fluctuations, political risks, withholding, the lack of adequate financial information, and exchange control restrictions impacting non-U.S. issuers.
Materials Risk. The companies engaged in the materials sector are subject to price and supply fluctuations, excess capacity, economic recession, domestic and international politics, government regulations, volatile interest rates, consumer spending trends and overall capital spending levels.
Small-Cap and Mid-Cap Risk. An investment in a portfolio containing small-cap and mid-cap companies is subject to additional risks, as the share prices of small-cap companies and certain mid-cap companies are often more volatile than those of larger companies due to several factors, including limited trading volumes, products, financial resources, management inexperience and less publicly available information.
Volatility Risk. The value of the securities held by the trust may be subject to steep declines or increased volatility due to changes in performance or perception of the issuers.
Operational Risk. As the use of Internet technology has become more prevalent in the course of business, the trust has become more susceptible to potential operational risks through breaches in cybersecurity.